SMART MONEY: Divorce leaves woman with car worth less than she owes

DEAR BRUCE: Our daughter divorced a year ago. In the divorce agreement, she retained the car that she and her ex-husband were paying for. She was to refinance it as soon as possible to have his name taken off.

After the divorce, she was out of work and could not obtain a loan. When she did get a job, no bank would give her a loan due to her low income. Her ex-husband sent her a letter stating he will take her to court to make her settle the car situation. She wrote him back explaining the problem and saying he can have the car and take over the loan if he wants it. He has remarried and has a better paying job.

She would love to sell the car, but can’t get the amount that is still owed on the car.

A couple of days ago, she was let go. Now she has no job to make payments. Her credit and her ex-husband’s credit will be blemished if she can’t make the payments. Is there anything she can do? — P.C., via email

DEAR P.C.: Your daughter certainly has her hands full. The reality is that the car is under water. There is no way she is going to get her ex-husband to take over the payments. And due to her circumstances, it would be more difficult to find anybody to refinance the automobile.

I would make this very clear in a letter to the ex-husband: If he could provide some reasonable way to achieve the result he wants, she will follow it.

The alternative is that, since she can’t make the payment or have the payment transferred to her responsibility alone, the creditor will immediately go to her ex-husband.

The holders of the paper only recognize that they have two signatures on the loan. They are not going to care about the divorce agreement.

She might be able to get a short sale approved by the creditor. That means that the creditor would accept less and write off the difference.

DEAR BRUCE: I would like to start an online women’s apparel business. I have only $1,000 in savings. Is it possible to get off the ground with such a small amount of money? — W.M., via email

DEAR W.M.: I am not going to tell you it’s impossible, but almost. You might be able to do some business on eBay. The problem is, where are you going to get the merchandise with only $1,000 in savings?

Unless you specialize in something like older garments that you will have to go out and find one at a time, I think you are heading up a very steep hill. You’ll have to invest a lot of time in scrounging up the garments and listing them on eBay and selling them. You’ll have to start slowly, but this could give you a decent start.

Send questions to bruce@brucewilliams.com. Questions of general interest will be answered in future columns.

Owing to the volume of mail, personal replies cannot be provided. The Bruce Williams Radio Show can now be heard 24/7 via iTunes and at www.taeradio.com. It is also available at www.brucewilliams.com.